Can Modi-Trump Duo Address the New-Age Tech Concerns?

As US President Donald Trump lands in the Indian soil, and gets a grand welcome by India’s Prime Minister Narendra Modi, industry experts hope that between dance performances in Ahmadabad and long walks up to the Taj Mahal, the Modi-Trump duo finds time to discuss the real potential in the US-India relationship.

In the two-day two-city tour, which Trump is undertaking on February 24-25, there is scope and a need for a serious discussion on establishing and strengthening international alliances to prevent the outbreak of pandemics, especially in the context of the Coronavirus outbreak, believe experts.

As Rudra Chaudhuri, Director of Carnegie India writes in a BBC news column, “Disputes about the use of emerging technologies and the challenges to the cross-border flow of data will require much thinking about the creation of new international structures (such as a partnership of like-minded countries) or the renewal of older ones (through the G20 for instance) to address these new-age concerns.”

Dealing with H1B visa curbs

The National Association of Software and Services Companies (NASSCOM) will take up issues relating to mobility of skilled individuals with the US administration. Officials of the industry body said that it will seek differentiation between skilled talent mobility and usual immigration.

“When there is lack of STEM (science, technology, engineering and math) talent, mobility of skilled professionals from India supports innovation in US firms. So, it shouldn’t be treated as normal immigration,” said the official.

Earlier, Debjani Ghosh, President of Nasscom, said the US administration has to realize that 90% of the H-1B visa holders are going to US companies and not to Indian firms.

Even through Indian IT firms are currently employing around 55,000 American professionals in the US, which is significantly higher than the previous years, the rejection rate of H1B visa applications for Indian professionals has increased manifold.

According to US Citizenship and Immigration Services (USCIS) data, denial rates for H-1B applications increased four times from just six per cent in 2015 to around 24% by 2019-end. A recent report mentioned, the denial rate jumped from 4% to 41% for Tech Mahindra, from 6% to 34% for TCS, from 7% to 53% for Wipro and from just 2% to 45% for Infosys.

Ever since Trump took charge as US President, Indian IT firms and Nasscom have increased spends for lobbying activities. Last year, Nasscom was the third biggest spender on lobbying on immigration and advocacy, according to data from research group Opensecret.org, which added that the industry body spent $510,000 in 2019. Microsoft was the biggest spender on lobbying activities at $7.8 million, followed by Cognizant, which spent $1.7 million during this period.

The US issues 65,000 H1B work visas to foreigners per year. Around 70% of this usually goes to Indian professionals. Despite consistent advocacy of technology firms for a liberal visa regime, the US administration has not eased rules much in the last four years. Rather, a lot of procedural complexities have been introduced with increase in processing fees under the Trump administration and it needs to be seen if this issue is discussed by the heads of the respective countries.

FII investment linked with technology

India must also push for diversified oil imports and higher FDI and FII investments linked with technology transfers. Abusaleh Shariff, a senior member secretary, Sachar committee and is with the US-India Policy Institute, Washington DC mentions in his article in The Indian Express that despite the government’s efforts to enhance foreign investments, new data suggests that FDI flows have slowed down to a trickle — at $8 billion in the last nine months.

“This is the lowest FDI seen during comparative months since 2015. Further, despite improving its standing in “ease of doing business” indices, India has failed to attract international investors mostly due to institutional failures. Global investors are wary of unstable policies in banking, international financial flows, legalities of business contracts, land and property acquisitions, and, politically biased judicial pronouncements,” he said.

5G to be on the agenda

5G, which is the next generation wireless technology set to accelerate data speeds, is expected to be on the agenda for discussion in bilateral meetings between the United States and India during Trump’s visit.

Ajit Pai, chairman of the US Federal Communications Commission, who is visiting India along with the US delegation, will discuss 5G with his Indian counterparts, he said in a Twitter post on Sunday.

“We will be discussing issues of mutual interest like 5G and bridging the digital divide and we will aim to deepen the friendship between the world’s oldest democracy and it’s largest,” Pai said in his tweet.

5G is the next generation of wireless technology and will boost data speeds and propel the Internet of Things, with the potential to bring radical changes in agriculture, manufacturing, healthcare and education.  Last month, India’s department of telecommunications (DoT) also approved the prices for the spectrum auction scheduled to be held by April. But the US has pressed its allies not to use China’s gear maker Huwaei’s 5G equipment alleging that it could be used by China to spy on other countries, an allegation Huawei has repeatedly denied.

While the world is now divided between whether or not to include Huawei the US is likely to put pressure on India to cut ties with Huawei as it has done with other trade allies. While things have been pretty good for Huawei in India and there’s been no ban on Huawei phones or telecom participation in India, an Economic Times report earlier this year suggested that the government may review its position in allowing Huawei to participate in 5G experiments. In that context will Trump use a ban on Huawei as a bargaining chip, is something experts wonder.

Also, now that the Coronavirus outbreak has exposed $46-billion dent in China’s tech industry, the principal aim of Trump’s visit is to further strengthen the “Indo-US global strategic partnership.” Under Modi’s six-year rule this partnership has already expanded dramatically, transforming India into a potential frontline state in American imperialism’s reckless military-strategic offensive against China. Will the strategic bet that America and India have made on each other deliver on its full potential? We need to watch out this space.